Infrastructure Minister Graeme Sturges announced yesterday afternoon that an agreement to transfer the rail network as a going concern - including the West Coast service - had been reached, but he added that the agreement was subject to approval by the Asciano board and State Cabinet by June 30.

"Lock, stock and barrel and locos - this picks up all the rail operations in the state, workshops, the Burnie loader facilities," Mr Sturges said.

"We have been quite hard in our negotiations to ensure that nothing was left out and that we can guarantee a future for freight rail in Tasmania."

Until the agreement receives approval, Mr Sturges said he would not be drawn on how much the Government would pay for the network, or where it would get the money from.

"Until such time as we can get that tick off, that next step in the process, it would be inappropriate of me to talk about the dollar amount ... But I believe it is a very good deal," he said. "I have been in contact with the Federal (Infrastructure) Minister and ... he is very receptive to talk with the Tasmanian Government about the very generous funding commitment that's on the table for rail in Tasmania, but it would be inappropriate of me to speculate as to what the outcome of that may be."

The Government's plans for the state's rail network are also unclear at this stage.

"We haven't purchased it yet, so let's not get too far ahead of ourselves," Mr Sturges said.

"Let's make sure that we today can give certainty to rail customers, to freight rail logistics customers, particularly - dare I say - the mining customers on the West Coast that rail will continue to operate.

"We will require some form of capital investment in the rolling stock, but there will be a seamless transition and rail will continue to operate."

Asciano managing director Mark Rowsthorn said he was also pleased with the outcome of the negotiations.

"An agreement with the Tasmanian Government will provide a seamless transition of our rail operations and ongoing security to our Pacific National employees, and will secure the future of freight rail in the state of Tasmania," he said.

Asciano had been unable to find a buyer for the rail network, which it offered for sale a year ago, and last week the company announced that it planned to close the West Coast's Melba Line.

The north-south line has been closed since mid-May following a serious derailment at Rhyndaston.

"There is no disguising the fact that this situation has presented a difficult challenge for us, and I would like to pay tribute to the head of my department, Norm McIlfatrick, and his senior officers for their tireless efforts both before and during these negotiations," Mr Sturges said.

See also:

State buys back rail

The Mercury: June 20, 2009
MICHAEL STEDMAN

THE State Government will buy back Tasmania's ailing rail operations, taking over from November 30.
The State Government and Pacific National's parent company Asciano had been locked in two days of crisis talks after revelations the company was pulling the plug on its operations from the end of this month.

Infrastructure Minister Graeme Sturges emerged from "very intense" negotiations at 4pm yesterday to announce the Tasmanian Government would take over the entire network by November 30, subject to agreement by the Asciano board and Cabinet.

Mr Sturges would not comment on the agreed price, saying only that the state had secured a "very good deal".

It is believed Asciano was seeking $40 million from a commercial sale process.

"It is a great outcome for the Tasmanian community, it is a great outcome for the business community, and it is also a great outcome for the employees of Pacific National Tasmania," Mr Sturges said.

All operations will continue until November 30, including the freight line to the West Coast mines.

Closure of that line could have put more than 100 extra trucks on the road every week.

The deal includes the profitable West Coast and Australian Cement lines, the Burnie concentrates loading facility and Launceston maintenance workshops.

"Dare I say it, we take it lock, stock, barrel and locos," Mr Sturges said.

There was no money in the State Budget to take over rail.

But Mr Sturges said he had had preliminary discussions with the Federal Government about using funds from the existing $250 million rail infrastructure package.

He acknowledged more money was needed to fix decrepit rolling stock and buy new locomotives.

Pacific National's time in Tasmania has been tumultuous, characterised by multiple threats of pullouts, train derailments and millions of dollars of public money spent on rescue packages.

Asciano announced the sale of its Tasmanian assets on June 12 last year.

Of five expressions of interest, a deal with preferred buyer Patriot Rail fell through in February.

After months of conflict and brinkmanship Asciano managing director Mark Rowsthorn took a conciliatory tone yesterday.

"An agreement with the Tasmanian Government will provide a seamless transition of our rail operations, ongoing security to our employees and secures the future of freight rail in Tasmania," Mr Rowsthorn said.

Tasmanian Chamber of Commerce and Industry chairman Andrew Scobie welcomed the agreement but said private sector involvement would be required in the long term.

"We now need to take the time to develop a 21st century rail solution that delivers benefit to the Tasmanian community," he said.

"The public and private sectors now need to work closely together to ensure a sustainable long-term solution."

Mr Sturges did not rule out eventually handing over rail operations to the private sector and there is speculation the Government is already in talks with a private consortium interested in above-rail freight operations.

The Tasmanian Liberals said the public deserved to know the cost of the deal, pointing out the network was sold to the Commonwealth in 1975 for $1.

"Will the money earmarked for urgent, vital capital upgrades now be used to pay out Pacific National?" infrastructure spokesman Jeremy Rockliff said.

See also:

Tourism operators eye rail potential

ABC news~: Jun 21, 2009

Freight and passenger trains could share the tracks. (ABC News: Andrew Fisher)

The prospect of a state run railway has Tasmanian tourism operators hoping for a rail-led revival.

The State Government has agreed to buy the rail network from operator Asciano for $20-30 million but the deal is yet to be ratified by Cabinet and the company's board.

Tasmanian Greens MP Tim Morris says there will be an opportunity to use the tracks for passenger trains.

"Freight at night and tourist operations during the day, it is really easy to separate trains," Mr Morris said.

"We have wonderful historic assets in working order that could pull up in Hobart next to a cruise ship, pick up loads of people and take them off for a wonderful trip around Tasmania for the day."

The Derwent Valley Railway has eight trains sitting idle and Chairman Craig Farrell wants to rekindle a rail passenger service between the Hobart waterfront and Mount Field National Park.

"All the infrastructure is there," he said. "The line is in need of a little bit of repair but we have the passenger cars."

Infrastructure Minister Graeme Sturges says his priority is a viable freight service but he will consider further opportunities once the takeover is complete at the end of November.